Rebills
The rebill, or the negative option billing scam, is usually legal but very shady.
The essence of the scam is that you sign up for a free trial of some product and only have to pay a couple of dollars shipping. What you missed in the reams of fine print is that after your trial expires, you’ll be charged a hefty sum every month to continue on the program. It’s usually a couple of months before you know and can get off the program.
This type of deal has been around for a while, especially for music clubs. The scammy version is different, though:
♦ The terms of the agreement are not made clear. You might have to go to another page or scroll down to see the catch.
♦ Often the trial starts from the day you sign up, not from when you get the product. People find that their credit card has been billed for the first month before they’ve even received the trial item.
♦ The product itself is poor, either by not living up to the medical claims made.
♦ It takes several hours of dialing to get through to customer service to get off the product.
These types of scams are all over, from advertising on popular Web sites to spam. Often you see the product on a personal Web site from a person purporting to have used the product to lose weight or make thousands of dollars. This person probably doesn’t exist; the seller has just made them up to try and get you to sign up for the trial.
Beware of anything offering a free trial that requires a shipping charge, and always check the fine print. Check your credit card balance online periodically (having a separate credit card for Internet purchases is also helpful), and call your credit card company at the first sign of abuse.
Another version of this involves your cell phone. You are given a free ring tone, or told that you need to provide your cell phone number to get the results of a test you just did. After you provide your cell phone number you are quietly signed up for a service on your cell phone that bills you every month.
You won the lottery!
Ever got an e-mail like one of the following?
♦ Congratulations! You won the Internet lottery!
♦ You have just inherited $1 million from a long-lost relative.
♦ I need you to help me get $5 million out of my country. You can have 40 percent for your efforts.
These are all scams.
The way these go is that you chat back and forth with the person, and at some point, they come up with a story for needing a few dollars, such as $50 to process some paperwork. If you pay that, more charges keep piling up for various things until you realize you’ve been had. This is called the advance fee scam. See Figure 1-4 for an example.
Figure 1-4:
The advance fee scam.
I really don’t think that Mr. Frank has the $6.3 million dollars. Just ignore e-mails like this.
These types of scams have been around for years, but the Internet has made it easier for scammers to find their victims. At one point many of the scam-mers were based out of Nigeria, so you will find this called the Nigerian scam or the 419 scam (419 is the section of the Nigerian criminal code dealing with such fraud). An Internet search for these terms uncovers a variety of different ruses used for the scam, along with some hilarious stories of people getting the scammers to do all sorts of silly things.
Looking at the amount of spam I get involving this scam, I can only assume that people are still falling for it. Indeed, I have seen a few stories in the news. One person was taken for $150,000, which gives you some idea of how bad it can get.
Check washing and the overpayment scam
Check washing is a process where a check that has been written on has the payee and amount removed (washed off), and a new value and payee put on. This was around before the Internet, but again, the Internet has made it easier to find victims.
Intercepting the check is surprisingly easy, so the scammers have a wide variety of potentially blank checks to choose from.
This scam generally works two ways. The first is that you are offered a job to process paperwork at home, which ends up being to cash some company checks. You send the money to your "employer," sometimes minus a small commission to you.
What has happened is that a legitimate check has been intercepted and washed, and your name has been put on it with a new dollar amount. You deposit the check, your bank advances you the funds, and then you send the money away. Usually you are told to use Western Union, which is an untrace-able system.
Eventually the bank finds out when the check bounces and takes the money back from you. But you’ve already sent the money away!
The second way this happens is that you offer something for sale online, and someone buys it from you. When it comes time to pay they try to give you a check for more than the sale price with some excuse for why. You are asked to send the difference back to them.
Of course, the check bounces, and you’re out whatever you sold and the cash.
To avoid this scam:
♦ Beware of any deal where you get a check and have to send money back.
♦ Never accept a check in response to an online dealing unless you know the person. Look into trusted systems, such as PayPal.
♦ Never send any payment to someone you don’t know by an untraceable method, such as Western Union.
♦ Keep your checkbook safe and watch your bank account for the checks you issue. This will help prevent one of your checks from being used for the scam.
♦ Remember that if it sounds too good to be true, it probably is.
Credit card stealing
Compared to all the other types of scams, this one is downright uninspiring:
1. You buy something online using your credit card.
2. The Web site you bought it from is hacked into and your credit card number is stolen.
3. Your credit card number is used to buy stuff, sticking you with the bill.
Fortunately, most countries have laws dealing with credit cards such that if you notice the fraudulent transaction before your bill is due, you can dispute the charge and not have to pay it when it’s shown to be fraudulent. Still, it’s an inconvenience to have this happen.
One sign to look for when paying over the Internet is that you are using a secure connection. A secure connection means that anyone watching your traffic will not be able to see the information inside because it is encrypted. Figure 1-5 shows an Internet Explorer window that is using a secure connection.
Figure 1-5:
A secure connection.
In the address, note that the URL begins with https instead of http. This indicates the connection is encrypted. Also note the picture of the lock. This indicates that the site you are browsing is the same one that was certified to use the security. Some older Web browsers place the lock in the bottom status bar instead of in the URL.
The certificate itself is no protection against someone coming in after the fact and stealing the data. This is an unfortunate part of the Internet and security. The credit card companies are still rolling out their security standards across their merchants, which will enforce rules protecting your information.
It is a good idea to keep a credit card for use only on the Internet, and to keep the limit fairly low. This makes it easier to spot fraudulent transactions and limits your liability should problems arise.
It’s Not AH Doom and Gloom
This topic has shined a spotlight on some of the darker parts of the Internet.
Tools by themselves won’t help you, though. You need to be smart before you open that attachment, or get your credit card out. The bad guys prey on greedy people. Don’t be one of them.
You can find a lot of good stuff on the Internet, and the bad guys shouldn’t keep you from it.
